Australia at work: managing adjustment and change

I would like to start by acknowledging the Traditional Owners of the land we are meeting on today, the Ngunawal and Ngambri people, and pay respect to their elders past and present.

Thank you for that introduction and thank you all for coming today.

I’d like to acknowledge our president Grant King who is here, and thank him for his leadership and support.

I’d also like to thank our member companies, who are here today.

My speech is about the much talked about concept - the future of work.

I want to talk about the transition underway in our society, and how work is changing.

I’ll share some important research that includes some surprising conclusions.

But mostly I want to talk about how we manage these changes in a way that builds a stronger and fairer country.

Before I start I want to take a moment to remind people who is business.

The business community is over 10 million working Australians.

They are the people who run the corner store; the people who work in the supermarkets and for airlines; it’s shareholders, almost six million everyday Australians; it’s regional suppliers; and rural producers.

Business is people.

From Brenda who appeared at our business showcase earlier this year and calls herself “Australia’s oldest checkout chick’’ after fifty years with Coles.

To the young Indigenous woman Naomi, who didn’t finish high school but is now one of Woodside’s proudest employees.

And Ali who has made the most of a second chance with DuluxGroup to re-train after the car industry wound up in Australia.

These are some of the people the Business Council represents.

So, what do we stand for?

We believe every Australian:

Should have the opportunity to realise their full potential;

They should have rewarding, meaningful and fulfilling jobs with a sense of purpose that allow them to get ahead;

They should have jobs with the opportunity for advancement, with higher incomes that give them greater control over their lives.

We believe all Australians should have:

Access to education and skills development across their working lives;

And, access to a universal high-quality health system.

We believe Australia should be an energy superpower where:

People have lower energy bills;

Where people have reliable and secure power;

Where we act on climate change;

And we accept our international obligations as set out in the Paris agreement.

We believe there is nothing more important to human dignity than a society where people are free - free to make choices and free to live their lives how they want.

If people have another way of achieving the ambitions I’ve outlined without strong private enterprises, then I want to hear it.

I know the business community must rebuild trust with Australians.

As part of this, we should take responsibility and show leadership for the transition and adjustment underway in our workplaces.

No Australian should be left behind.

Business needs to understand and plan for the future, never forgetting that people are at the heart of their success.

Individuals also need to do their part by preparing for more change and continuing to learn so they can keep pace with the changing world of work.

In turn, as a nation we need the right settings for small, medium and large companies to thrive, encouraging investment, innovation and enterprise.

All Australians should be optimistic.

Australia is a talented and high-skilled country, with a good track record of adapting to change.

Let’s not be complacent about change, but let’s not be overly anxious.

Now, let’s go to the topic - the future of work.

A phrase that is potentially meaningless and at the very least is bound to create more confusion and unease than clarity.

The simple reality is that everything in our society is about whether someone has a job, a good job, and can lead a life of purpose.

It is about whether the aggregate effect of over 12 million Australians working is a society more capable of looking after its citizens each and every year, particularly those people who are excluded from work.

Let’s not carve off the future of work as a type of program or as a side issue. It is not.

Surely work is at the centre of all economic policy, so why seek to treat it in isolation?

Imagine if 200 years ago we had set up the Department for the Industrial Revolution?

So, let’s stop using this expression because, with the greatest respect, it is a term for consultants and a topic for books.

Fixating on doomsday predictions that robots will take over the world diverts our attention from focusing on the real adjustment taking place in our society now, and how we protect those people and communities most at risk.

Technology in all its forms - whether it is artificial intelligence, robotics or digitisation - is impacting on the way we work, live, and socialise.

But we are yet to really understand the full impact of change, so 12 months ago, the Business Council began a project to explore the forces of adjustment and transition in our workplaces.

With this project, we wanted to understand:

Whether this period of change is different;

Whether the size of the prize is worth chasing;

What jobs will be at risk, and where;

And, whether our structures and institutions are set up to manage the evolution in a fair and just way.

So, let me go to the differences.

One of the defining features of this period is the pace and scale of disruption.

Products and ideas race around the world faster than we have ever seen before.

It took television 13 years to reach 50 million users.

And while it is not comparing apples to apples, Facebook reached 50 million users in one year.

Pokémon Go reached 50 million users in just 19 days.

In its first 90 days after release, the online game Fortnite earned $US100 million.

Roy Morgan estimates that almost one in five Australians aged over 14 used Uber last year – that’s getting close to four million people.

It was just under one million people, two years ago.

The scale of change is also enormous.

McKinsey estimates about 25 per cent of tasks in Australia could be automated by 2030.

Deloitte says nearly nine out of 10 Australians have a smartphone – one of the highest rates in the world.

And, of course, this is all data. Let’s reflect on how technology continues to push boundaries.

At home, technological advances have liberated many people from menial and mundane tasks.

Technological breakthroughs have changed lives.

From the veterans who can now walk because of high-tech artificial limbs, to the children who can hear with a cochlear implant, and the Australians who are alive today thanks to the coronary stent.

Technology is expanding our horizons. A solar-powered plane can now fly around the world without one litre of fuel.

And it will be technology that gives us the best chance to reduce world poverty, to bridge the educational divide, to manage climate risk, and erase distances to bring us closer together.

The opportunities are limitless. The challenge is to ensure they are fairly shared.

The rise of the empowered consumer also makes this era different.

Consumers are driving business models and service delivery, instead of corporations and governments.

It is the ultimate manifestation of people power.

Change also presents us with the potential for a substantial payoff.

The question is whether it is worth adjusting?

McKinsey estimates that embracing digital technologies could add up to $250 billion dollars to the Australian economy by 2025.

And the head of the Department of Prime Minister and Cabinet, Martin Parkinson says: “done right, this technological revolution will drive the next wave of jobs, and growth in productivity and living standards’’.

And, it’s worth repeating - if done right.

If we hit the pause button out of fear, it will only mean that other countries get ahead of us.

And, here’s the red flag.

Australia is already trailing when it comes to investing in technology.

AlphaBeta estimates that just over nine per cent of listed Australian companies are making a sustained investment in automation.

This lags behind the UK and Germany, and is less than half the number in the United States.

We cannot afford to slip further behind – our very future depends on it.

Now let’s go to the data and what we found.

We wanted to know whether more people are losing their jobs and if they’re being displaced by technology.

Our findings covered two areas: job loss, and task change.

The projections of job losses from technological change are highly contested, so the job of policy should be to focus on managing the change we know and the change we understand.

We are concerned that people are using extreme predictions rather than actual trends.

Change is already upon us. These forces are happening today.

But our data tells us some important things. We are creating more jobs in more industries including new and emerging sectors.

Two weeks ago our unemployment rate fell to five per cent – the lowest rate in over six years.

There is little evidence to suggest that technological change is speeding up the rate of job loss in our community.

AlphaBeta estimates that the rate of job loss due to automation is no higher today than in previous peaks over the past 50 years.

Our analysis shows the percentage of workers forced to change jobs has almost halved over the last two decades.

Whilst this is an improvement, it does not diminish the shocking impact on individuals and their families.

We must challenge ourselves to minimise the personal toll.

The key for business is to be transparent about data with their customers, and be transparent about technology and change with their workers.

Business must actively manage that change and not leave it to chance.

The research we are releasing today from AlphaBeta tells us the most significant impact on our working lives will be in the way we perform the tasks that make up our jobs.

Over the past five years, the average level of change in tasks within an occupation has been almost 10 per cent.

Australian workers now spend about half a day a week doing different tasks than someone with the same job just five years ago.

Architects; secretaries; and retail managers have experienced the most change.

We don’t know whether this trend will continue or increase but it is safe to bet that task change will impact every job in the future.

IBM boss Ginni Rometty says: “When it comes to complete job replacement, it will be a very small percentage; when it comes to changing a job and what you do, it’ll be one-hundred per cent.”

The reason task change is so important is because it is the best weapon to protect jobs and create new jobs.

Jobs with a higher rate of task change are less vulnerable.

Jobs with a lower rate of task change are at greater risk.

Our research shows that over the last five years, workers in low-skilled jobs had the lowest rate of task change but the highest rate of retrenchment.

Workers in high skilled jobs were the reverse.

They had the highest rate of task change and the lowest rate of retrenchment.

This is my central message to Australians: to keep people working and to keep jobs in Australia, we need to embrace the change within our jobs and be ready to adapt.

Resisting task change leaves us vulnerable.

Our analysis shows we need to pay particular attention to the following groups of people:

Low-skilled men aged over 55-years, especially those working in construction and manufacturing;

Low-skilled people in regional areas;

Parts of the financial services sector where projections of job losses are much higher;

And low-paid, low-skilled women who often work in the most undervalued jobs.

I’ve just outlined what the data is telling us, now let me examine what we’re less confident about.

We don’t know whether we will be replacing jobs at the same rate they are being lost.

The only way to do this is to make sure we have a strong economy with new businesses and new jobs being created.

We are also less certain about which tasks will create new forms of value.

Changes in consumer preference will create new jobs and tasks that we can’t even imagine today.

As a society, we are demanding a greater variety and more services than we previously did because people have higher discretionary income and they are time poor.

There are plenty of tasks to do that will create value. The challenge is to reward them properly and to protect people.

I do not want to see a class of people trapped in low-paid, challenging or even exploitative jobs.

We need to carefully consider how we protect people without creating the rigidities that smother job opportunities.

Having said that, I do believe competition and demand will ultimately drive higher value.

In this ever-changing world of work, business has a very clear set of responsibilities as tasks change.

They must design jobs to reflect those changes and they need to train their staff accordingly.

They need to make sure they pass on the gains of innovation and productivity:

To their employees through higher wages;

To their shareholders through better returns;

And to their customers with lower prices and better services.

So, to sum up, what do we know?

We know that tasks are changing, rather than mass job losses.

We know that technology has not altered the rate of people losing their jobs.

We know those who are most vulnerable are the lowest skilled people, who are older, people in the regions, and people who are already disadvantaged.

Crucially, the more resistance there is to task change and adaptation, the more likely it is that jobs will be at risk.

So, when I hear people saying they want to slow down this rate of change, erect barriers to transition, and bring back protectionism, I shake my head.

This is ubiquitous.

It’s unstoppable.

It’s borderless.

It’s consumer driven.

It’s skills-focused.

If done well, it will be a force for good.

It could unleash the greatest period of human advancement in history.

If done badly or resisted, it will put more jobs at risk and create greater inequality.